The Iowa Student Loan Liquidity Corp., 2023B, is returning to raise $172.3 million in asset-backed bonds from investors, its first deal in a little more than a year. The bonds are expected to be fixed-rate, serial and term bonds
The transaction raises funds from a pool of private student loans and is the third securitization from the ISL 2019 trust indenture, according to ratings analysts from S&P Global Ratings. Proceeds from the bond sale will repay advances made under a warehouse facility and thereby refinance a couple of pledged portfolios, and originate new loans under the 2019 indenture, according to S&P.
Iowa Student Loan Liquidity, 2023B, is expected to have an initial senior parity of about 137.5%, and an initial total parity ratio of about 127.6% after the bonds are issued to investors, according to S&P. The deal is expected to close on Aug. 22, 2023.
The deal also has a reserve account with an initial balance of $8.0 million at closing, representing 2.0% of the initial bond balance, the rating agency said, and the trust must maintain a reserve account balance that amounts to the greater of 2.0% of the outstanding bonds or $2 million, the rating agency said. Some 22,296 loans are in the pool. Borrowers, on average, have an average balance of $27,059, with an average FICO score of 760.7. Per loan that balance is about $18,581 on average, according to the rating agency.
Broken down by loan status, some 67.9% of the loans are in the repayment phase, while 15.9% are in deferment or held by borrowers still in school, and 10.7% are in residency. Some 69.7% of the loans are cosigned, and 76.0% are funding educations at four-year schools.
S&P expects to assign ratings of 'AA' to all of the notes, which span 10 classes of notes, including series 2023A and 2023B. Maturity dates range from Dec. 1, 2026 through Dec. 1, 2043.
